THE CRISIS OF LOANS DENOMINATED IN SWISS FRANCS Borrowers getting even with banks

The crisis of loans denominated in Swiss Francs (CHF) has caused those that have outstanding loans in that currency to resort to a new strategy.

Whereas over the last few days, every now and then, there would be one customer that repaid part of the installment in 10 or 50 bani coins, yesterday, debtors did so in a coordinated manner, as several branches of banks that have exposure to CHF loans were blocked all day.

Debtors say that in doing so, they are boycotting banks, preventing them from conducting their day-to-day operations.

It would seem that at some bank branches, the situation escalated, as their employees called the police.

Andreea Cristoforidis, one of the initiators of the Group of Borrowers with loans denominated in CHF told us: "We have come to this because we are desperate. We have deadlocked the counters of several bank branches in Bucharest and all over the country (focusing mostly on Bucharest), of every bank that has lent money in CHF. We did so in shifts, some of us took time off from work. We paid in all kinds of coin, starting from one ban, amounts of several hundred lei, in general. One of the debtors paid 1,000 lei over the course of a few days.

Banks' reactions varied. While in some cases, their employees have understood that this was a protest and let us be, others threatened they would call security, and in some other locations, such as at some Raiffeisen branches, they actually called the police. The policemen refused to draw up a report, and they have asked the banks to file a complaint. It is a situation where the borrowers in CHF who are present in the branches in question have their hands tied, because the action is unilateral, as it is the banks that call the police.

Another situation that is at least strange, if not outright illegal, is the fact that some of the payment operations were conducted at the employees' desks directly, not at the cashier's desk. There have been banks that have opened a new cashier's desk, prohibiting operations in Swiss Francs, and then they dropped that restriction, because we have requested that in writing, and there have been banks that have called the other customers into offices, for their payments".

• Raiffeisen Bank: "We consider the actions of those who, on one hand choose not to discuss their situation with the bank, but on the other hand choose to obstruct the bank's activity and that of other customers to be in bad-faith"

Referring to the latest situation that has occurred Raiffeisen Bank branch in the Unirii Square in Bucharest, where the intervention of the police was necessary, the representatives of the bank in question told us: "Raiffeisen Bank has found out about the intention of some of its customers that have outstanding loans denominated in CHF, which they had announced on social networks, to obstruct the activity of some bank branches by making successive deposits using small amounts (one leu). In order to be able to service all of our customers, we have organized in every agency a desk especially dedicated to these operations, to allow every customer to complete the operations they came in for.

In the afternoon of February 11th, a group of ten customers wanted to make successive deposits of 1 leu or less at one of the bank's branches in Bucharest in order to repay some loan installments. After they were directed towards the counter dedicated to these operations, they became angry and verbally aggressed the staff of the branch, as well as the other customers present in the agency. As a result, the policemen from the police precinct in the area were called.

Raiffeisen Bank apologizes to the customers affected by the behavior of the people in question. We also think that this behavior represents an abuse of the law.

According to provisions of art. 15 of the Civil Code, «no right may be exercised in order to harm or damage another, or in an excessive and unreasonable manner, that goes against good-faith»".

Under these circumstances, we have decided to limit the allowed consecutive cash deposits, for the payment of installments to every type of loan, to a number of five operations a day. We consider the actions of those who, on one hand choose not to discuss their situation with the bank, but on the other hand choose to obstruct the bank's activity and that of other customers to be in bad faith".

Representatives of Bancpost have also confirmed that some of its branches have seen cases where the cashiers' were deadlocked by those who paid off their loan installments using coins, thus stressing the notion that their other customers were affected as well and that the employees of the institution have tried to resolve the issue by opening new cashier's desks. Other banks did not respond to our enquiry on their opinion on yesterday's actions of the CHF debtors.

The manager of the Magheru branch of Bucharest of Credit Europe Bank, one of the banks where the reporter of BURSA was present during the action of CHF borrowers, seemed visibly nervous during the questions about the actions of the boycotters.

He declined to comment the situation, saying that he knew nothing about the matter.

• Cătălin Voivozeanu: "The boycotts will continue"

The "insignificant" offers sent by the banks have caused debtors to protest by boycotting some bank branches, said Cătălin Voivozeanu, another founder of the Group of customers with loans denominated in CHF.

He said: "We thought that we should get their attention somehow. I paid with four coins of one ban, which means 0.1 Swiss francs. It isn't a good thing for me, nor for them, to have their cashiers' desks deadlocked, but we are still waiting for a reasonable offer from them, which hasn't come yet. There can be no individual negotiation with a bank. There are hundreds of thousands of contract holders, because the ones that have already been exported, (ed. note: sold by banks) were not included in the number of 75,000 customers mentioned by the NBR. My contract is in Holland. That is why one cannot resolve such an issue individually. This situation requires an administrative intervention, through a clear law. You can't just bring up an individual solution for a general problem, like the NBR has requested. We need to share the burden".

According to Mr. Voivozeanu, yesterday's actions will continue in the coming days as well.

• Andreea Cristoforidis: "Banks talk about negotiating, but they don't actually negotiate"

Andreea Cristoforidis confirms what other CHF borrowers are saying, namely the fact that banks are not open to negotiations: "Banks talk of negotiating, but they don't actually negotiate. Some of them have proposed the cut of the interest rate for three months, but have included abusive clauses demanding that we accept the prior currency risk and agree not to sue them. One of the banks refused to give the customer the appendix to the contract drafted as a result of the negotiation, saying that it was only valid for two hours. It is absolutely illegal, because government ordinance 50/2010 stipulates that the bank must allow the customer to take the contract home to review it".

Some of the borrowers claim that the answers they received include the likes of: "If you can't afford to pay anymore, sell your coat" or "The solution lies with the NBR".

NBR governor Mugur Isărescu has a different opinion, stressing that in fact, the solution lies with the government.

The head of the Central bank said on Tuesday, that the solutions which would need to be identified following the individual negotiations between the banks and the customers should result in keeping the monthly installments at a similar exchange rate to the one of December 2014.

In the opinion of the NBR, the conversion of the loans at the current exchange rate with an applied discount, would be the best solution, as the level of the discount would be set on a case by case basis, by the two parties.

"A conversion at the current exchange rate with a discount applied to the balance of the loan is basically the same thing as a conversion at a lower exchange rate", Mugur Isărescu said.

The governor of the National Bank of Romania said, on Tuesday, in the Chamber of Deputies, that the NBR has gotten involved heavily in identifying a solution to resolve this situation, stressing that "it has reached the details level in its talks with the banks": "We have spent nights with the representatives of the banks, and Mr. deputy governor (ed. note: Bogdan Olteanu) can confirm. He went to the banks and talked to employees at the counter, but I am not advising the idea of noisy involvement in this situation". The head of the NBR says that he advised bankers to act "with finesse" with these customers.

The National Bank of Romania (NBR) pleads for market solutions, instead of administrative ones, to the crisis of Swiss franc loans, Governor Mugur Isărescu further said.

In his opinion, a law that that would convert the loans denominated in CHF to lei at a different exchange would lead to a systemic risk.

CHF borrowers think that, through his statements, Mugur Isărescu "supports the banks".

"The losses that the NBR, the Romanian Banking Association and the representatives of the banks are actually decreases of the potential profits, not losses in their true economic sense", they stress, in a press release: "If we make the same calculations for the consumers, however, we will realize that debtors are already suffering a real loss, just as it is described in a dictionary or in any accounting manual. The installments in lei, have nearly doubled since the loans were contracted! If no solution is found, we are actually talking about the debtors' personal bankruptcy (regulate through the law or not). In these situations, the banks will be forced to foreclose on collaterals that have a significantly diminished value, and to harass the debtors to recoup (with much difficulty) the difference".

• Marius Dunca: "There are cases where the interest rate on CHF loans has reached 12.5%"

Marius Dunca, the president of the National Authority for the Protection of Consumers (ANPC), says that "banks should come up with solutions".

He said: "We are trying to mediate this situation, but I see that a solution is just not coming. The ANPC considers that the solution which should be found for this issue should stipulate the 20% cut of the loan or of the interest rate".

The president of the ANPC is warning consumers to be careful over new costs in the event of a conversion, saying that there are cases where the interest rate on CHF loan, which had been fixed in the first two years, have now gone as high as 12.5%.

In this context, he told us: "I weep for the consumers, not the banks".